This article was first published in MIT Sloan Management Review and is available via subscription.
BCG’s Adam Job, Ulrich Pidun, and Valentín Szekasy’s analysis of 6,000 companies reveals that during times of high uncertainty over the past 15 years, only 10% doubled down on M&A spending, increasing it by 100% or more. Then over the three subsequent years, the revenues of these businesses grew nearly twice as fast as those of their cautious peers, and returns were 50% higher. Why did so many companies—90%—hold back?
In this article, the authors debunk three myths about bold bets that hinder leaders in turbulent times: a company must be in a position of strength, have a risk-taking track record, and have a product portfolio cushion to fall back on. However, key to successfully taking risks is being prepared and ready to act when volatility creates opportunity.